Community store price gouging

Price gouging in remote NT communities’ is greedy and predatory and Steve Smith, CEO of Aboriginal Investment Group (AIG) and former Assistant Director of Compliance and Enforcement of the ACCC says, enough is enough and it needs to stop. He believes a retailer such as Aldi supermarket chain could hold the answer.

“In good conscious we cannot continue to stand back and let the price gouging of Aboriginal people in remote communities to continue. It is having a negative impact on health and wellbeing and we need to be involved in stopping it”

We went shopping

To illustrate his point, Steve went shopping:

Darwin supermarket: 

Milk 2L $2.00

Oats $1.20 (750g)

Flour $7.50 ($0.75 per kg for 10 kg)

Antiseptic solution $3.65

Total $14.35

Community store:  

Milk 2L $7.36

Oats $9.50  

Flour $48.85 for 10kg

Dettol antiseptic solution $14.19

Total $79.90  

“We have concerns that major players maybe limiting brand options, because the higher profile stocked brands provide rebates. Whilst this is not illegal, it is absolutely unconscionable. It raises the individual shelf price of items, and the rebates are not passed on to stores. Outback Stores annual rebates in 2015/16 was $592,000 and 2016/17 $615,000. Shoppers cannot choose the budget version because often it isn’t stocked” says Steve.

There are two major store management players in the NT

Community stores are dominated by two major players; Arnhem Land Aboriginal Progress Association (ALPA) and Outback Stores (Commonwealth owned). Both entities purchase their goods from limited suppliers.

“Our primary concern is the lack of competition which leads to high prices and limited choice, meaning Aboriginal people are simply unable to afford even the most basic and fundamental goods. I completely understand community store prices can’t be as cheap as Coles or Woolworths, but there is a serious issue when Outback Stores charge $62 for nappies that can be bought elsewhere for $25”. This is about introducing competition into the market to drive the prices down. A retailer like Aldi can do that, and so we welcome their business to remote NT”

AIG can assist new players

Steve believes AIG is well-placed to assist a new entrant into the retail grocery sector and has capacity to provide stores and warehousing facilities in both Darwin and Alice Springs. AIG can assist in establishing supply chain networks, quickly facilitating access to Aboriginal land and has the ability to negotiate and facilitate supply agreements with Aboriginal community stores.

For more information contact:

Steve Smith

Aboriginal Investment Group CEO

08 8922 2666